Intellectual property insurance protects owners of patents, trademarks, and copyrights by covering legal costs and sending letters to infringing parties. Insurers require proof of ownership and prohibit knowingly infringing on others’ rights.
Intellectual property insurance is available to any business or individual that owns rights to intellectual property and helps defend those rights. This saves the owner time because when an infringement is discovered, the intellectual property insurance company will research the matter and send a letter asking the infringing party to stop. If this doesn’t work, the insurance covers the legal costs, whether or not the landlord is sued or has been sued. Someone cannot get this insurance if they have knowingly infringed on an intellectual property and documents saying so must be presented before getting this insurance.
There are many products, works of art and inventions that are legally owned by a person or a business. To enforce this property, the owner can apply for a trademark, patent, or copyright to legally acknowledge the property. Most intellectual property insurance policies protect the owner, regardless of what rights they have, but some may cover only one or two types of rights, such as patents and copyrights.
When another company or person infringes property rights, the owner must research the object to see if it is indeed infringing. He or she must also locate the violating party and a letter must be written asking the violator to stop the violation. This can be time consuming and can be stressful for an owner who does not know the correct protocol for this initial step. With intellectual property insurance, the owner contacts the insurer about the possible infringement, and the insurer does the research and writing.
The legal costs of an intellectual property lawsuit are high and can easily bankrupt a person or business. Whether the holder of intellectual property insurance is suing or being sued, this insurance will cover some or all of the attorney’s fees, depending on the policy. If the intellectual property owner sues and is compensated in cash, the insurer will typically reclaim some of the earnings.
Some intellectual property owners may knowingly infringe on someone else’s rights and then use intellectual property insurance to keep legal costs down while they try to ruin the other person’s business or bankrupt them. To prevent this from happening, most insurers require several documents before giving anyone this insurance. The prospective insured must submit documents proving that they have completed an official intellectual property search; copyright, patent or trademark documents must also be submitted.
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